Inertial sensor market to grow 20.3% annually to reach USD2.56B in 2015
The MEMS accelerometer market will be strategic because many applications are expected to rely on 3-axis accelerometer + 3-axis gyroscope in a single package within 2015. There is thus a strong synergy between accelerometer and gyroscope technologies and players. The gyroscope market is really thriving thanks to the successful introduction of 3-axis devices by ST Micro and InvenSense. While adoption in handsets is only starting to surge, (with iPhone since June 2010 and now with Android smartphones) the gaming market is quickly growing and additional markets are emerging like tablets or remote controls.
Compasses are also gaining strong market traction. 2010 was an incredible year for digital compass in handsets, but the market will find growth outside of the mobile phone area as well: on gaming, on DSC for advanced geo-tagging. It will be particularly interesting to monitor strategies of newcomers to compete against AKM who is way ahead in the market, notes Robin.
Competition is gaining in intensity as the motion sensing market becomes increasingly attractive. More than 50 companies are targeting this business including large players and small companies. But in the consumer market only a few companies are really making money out of this business, while the others are struggling to make a decent profit.
Several levels of competition are shaping the market
- Competition among companies trying to offer a complete product family (accelerometers, gyroscopes and magnetometers), either internally or with partners (ST is partnering with Honeywell for example on electronic compass).
- Competition among devices: accelerometer, gyroscopes and electronic compass can provide functions, either alone or in combination with each other. So companies have to propose the best sensor or sensor combination for a dedicated function.
- Competing business models: fabless companies (InvenSense for example) are competing against integrated device manufacturers (ST, Kionix, Panasonic, Epson Toyocom, Freescale…). Optimization of the production cost is one of the biggest key success factors. It is thus necessary for all players to work hard in order to really get the costs lower and produce on 8 inch wafer lines at a reasonable yield.
- Hardware competing against software: companies such as Movea start to impact the traditional supply chain model by bringing a novel expertise in software and sensor fusion.
- Technology competition: companies are proposing discrete devices (a 3-axis accelerometer, a 3-axis gyroscope…) or sensor combination (acceleration sensor plus gyroscope, gyroscope plus electronic compass…) either in a system-in-package or on a single die, along with a transition from a sensor offer to a solution offer (with sensor fusion).
Which company, business model, device… will win?
It is both a booming and fragmented market so multiple companies can have an important part of the business. Cost-effective production infrastructure is clearly important but as the market will be moving from device to functions, the software and “function delivery” part of the business will be more and more significant.
This area is exciting and still far from being mature. “We expect considerable evolutions in the next years as illustrated by the strong demand for more precise and long-term navigation solutions, including indoor pedestrian navigation”, explains Robin. In parallel to the current race to develop ultra-low cost versions of motions sensors, few start-ups are working on revolutionary motion sensing technologies by using different sensing principle or different way of combining motion sensors, with compatibility to a low cost production infrastructure.
The Motion Sensors for Consumer & Mobile Applications Report is available from Yole Développement at www.yole.fr